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1.3 Projection of Revenues The first step in developing the revenue requirement was to develop a projection of the local sewer rate revenues, at present rate levels. In general, this process involved developing projected consumption/billing units for each customer group. HDR reviewed the revenue projections provided by City staff that were utilized in this study. 1.3.1 Development of Rate Revenues The City currently has a number of different rates for the various types of sewer customers served. The present rate for single- family residential customers is a bi- monthly rate of $21.70. There are discounts for this rate for seniors and low- income customers. Given the requirements of Proposition 218, which does not allow for low income /senior subsidies, at this time it appears that the City's general fund will make the sewer utility whole by transferring the difference between the single family rate and the low- income and senior rates. Condominiums and multi- family dwellings are billed a monthly flat rate based on the number of units, but at a lower rate than the single- family rate to reflect differences in estimated volumetric contributions. Previously townhouses were also charged a monthly flat rate which was less than the single family rate, however, in order to maintain continuity between the local and regional sewer charges the townhouses will now be charged the single family rate. For the commercial customers, the City has a number of different rates based upon the type of business (bakery, fast food restaurant, etc.). However, the commercial customers are billed on the basis of water consumption not on a per unit basis. As with the residential customers, the revenues for the commercial customers was projected based upon the various commercial rate categories and rates in place today. At the present time, the City receives approximately $3.5 million in local sewer rate revenues. Over the eight -year planning horizon, assuming no rate adjustments, the local sewer rate revenues are anticipated to grow to approximately $4.3 million. This growth in revenues is a function of the assumed customer growth on Pleasanton's local sewer system. Within this study, the City's local sewer rate revenue growth has been assumed to be 2.0% per year. 1.3.2 Development of Miscellaneous Revenues In addition to rate revenues, the City also receives a variety of miscellaneous revenues. Interest income is the largest source of miscellaneous revenue, but there are also a variety of other miscellaneous revenues. The utility is projected to receive approximately $155,000 in miscellaneous revenue in FY 2010. By FY 2017, the miscellaneous revenues are projected to be approximately $168,000. On a combined basis, taking into account both the rate revenues and miscellaneous revenues, the City's total projected local sewer rate revenues is expected to be approximately $3.7 million in FY 2010, increasing over time to $4.4 million by FY 2017. q D evelopment of the Revenue Requirement 1-3 City of Pleasanton Local Sewer Rate Study